Brazil has expanded diesel subsidies and temporarily reduced federal taxes on gasoline and ethanol, with total fuel-relief spending expected to reach approximately BRL 40 billion through September 2026.
Brazil’s government announced fresh fuel relief measures on 9 September 2026, expanding diesel subsidies and cutting taxes on gasoline and ethanol. The move comes as crude oil prices remain elevated near USD 100 per barrel, driven by regional tensions in the Middle East.
The Planning and Budget Minister Bruno Moretti confirmed that total fuel-relief spending will reach approximately BRL 40 billion between March and the end of September.
Tax reductions on gasoline and ethanol
Federal taxes on gasoline will drop by BRL 0.63 per litre over the next 30 days, up from the previous BRL 0.44 per litre subsidy. Ethanol taxes fell by BRL 0.19 per litre, eliminating all federal levies on the biofuel.
Monthly costs for these measures total around BRL 2 billion.
Diesel subsidy expansion
The government added a fresh BRL 1 per litre subsidy to diesel, layered on top of the existing BRL 1.12 per litre subsidy running through at least the end of September. The new scheme requires fuel producers and importers to deduct subsidy amounts from sale prices and record them on invoices. State oil regulator ANP then reimburses participating companies.
The diesel subsidy carries a monthly fiscal cost of BRL 5 billion.
Offsetting costs with oil revenue
Government officials stated that higher oil prices generate roughly BRL 10 billion in extra monthly revenue through increased tax receipts and royalties. This windfall covers most of the subsidy expenses. An executive order authorised BRL 6.6 billion in extraordinary spending, with BRL 5.6 billion directed to diesel subsidies and BRL 998 million supporting domestic gasoline production and imports.
